Chris and Jan from Louisiana had very definite ideas of what they wanted in a mobile home park investment. And they stuck with those criteria until they found the right parks – and what a great decision that turned out to be. In this event titled “Young and Retired: A Lesson in Persistence” we had a candid discussion about what their criteria were, how they got into the business, how they found each property, how they financed them, what the turn-around plans were – everything. It’s a great story about sticking to your goals and not letting up on those until you find just the right property.
Your host is Frank Rolfe who, with his partner Dave Reynolds, is among the largest owners of mobile home parks in the U.S. with around 200 properties. Frank also started with just one park, but not with any advanced criteria, which is because back in 1996 nobody had ever developed any science about the industry. That’s why most of his purchases were like an action movie – he bought first and then learned how he’d screwed up later and spent the rest of the time trying to solve the issues he inherited. This Lecture Series event is designed to help you not repeat those mistakes.
If you want to learn skills that Chris & Jan used to succeed with parks, attend our Mobile Home Park Boot Camp. You’ll learn how to identify, evaluate, negotiate, perform due diligence on, finance, turn-around and operate mobile home parks. The course is taught by Frank Rolfe who, with his partner Dave Reynolds, is one of the largest owners of mobile home parks in the U.S. To learn more Click Here or call (855) 879-2738.
Young And Retired: The Story of Chris & Jan - Transcript
Frank Rolfe:
Welcome to our [inaudible 00:00:04] event. This is Frank Rolfe, it's my pleasure tonight to be here with Chris from Louisiana. Chris is a guy that came to boot camp back in 2018-2019, in fact he was at the one where we had picketers from the North Lamar Mobile Home Park in beautiful Austin, Texas, they were there to try and disrupt the boot camp as best as they could. But they failed in disrupting Chris from his mission. He went and then he started looking for a park, found one in Louisiana that he liked, he's bought it, he's turned it around, and now he's basically retired. So we're calling this thing Young and Retired: The Story of Chris from Louisiana. So Chris, how are you doing today?
Chris H:
I'm doing great, how are you?
Frank Rolfe:
Well, great. We're thrilled to have you here. So let's just start with some basics. So you're there in Louisiana, why in the world would you want to buy a mobile home park? What gave you the idea to even look at buying a mobile home park?
Chris H:
Oh man, the story goes back so far. When I graduated high school, I was kind of always on my own, so I bought my first mobile home and lived in it. We had some family land, so I moved it ... It was bad, it was beat up. And we did some renovations on it, and we noticed that it wasn't really as bad as we thought it was going to be to renovate it. They're kind of like Mr. Potato Heads, you just pop something off and put something on. The floor's easy to get to, the plumbing's easy to get to. If the electrical's inside the walls, it's kind of easy to get to, as long as you pull the wall off, but it's not that big of a deal.
Chris H:
So my wife, that's sitting right here ... Come here. I married her, and we moved in to this little mobile home, had a paid-off mortgage, had everything great. Then we got this idea that we wanted to joint the rest of humanity and purchase a house. Can you see?
Jan H:
Yeah, I can scooch [crosstalk 00:01:51]. Sorry.
Chris H:
So anyways, we purchased a house and we rented out this mobile home. The cashflow, we noticed, for one was pretty decent, because we didn't have a mortgage on it, and then I think later on there was a lady that lived on the land that wanted to sell her home, and she wanted like, I don't know, $50 million for this trailer, and we're like, "Well, we'll give you $2000." And she was like, "Deal." So we took that, put someone else in there, cashflow kept coming. The only problem we had was the maintenance, we had maintenance on it for days, just because you're in the business of renting. What did we do after that? Then we, I think ... Oh, yeah, yeah, yeah. Like four months after we bought our house, she got pregnant with a baby, and I was like, "Well, all right, that's going to have to change some things."
Chris H:
So we tried to figure out exactly what we needed to do to position ourselves in the future. So we downgraded that home, sold that home to a lesser home, kept the two mobile homes. What did we do? We sold one of them and kept the other, but we gave it to the person and we just rented him the land space, and when we noticed that we didn't get a phone call, we got one phone call in like three years, and that was because an old galvanized water pipe had busted in the yard, and we sent a guy over there to fix it and didn't hear anything else from it.
Chris H:
Later on we sold the land, we finally left that next home, got another place and rented that place out, got back into the rental business, which, live and learn. Figured out that now you're back into this different business that looks the same as mobile home park land rent, but it truly, obviously is not. That didn't go too well. So we were like, "Hey, what if we got an apartment complex where we have four doors instead of one door, and one roof with four doors versus one roof with one door? Maybe there's safety in numbers."
Chris H:
Once again, we were still in the rental business. So we never purchased an apartment complex, but we had looked at it. At that time I was working in orthopedics, raising our child. Saved up some money, we had some friends approach us and asked if we wanted to go into business with what they do, which was gas stations. So we said, "All right, why not?" So I quit my job that I'd been there for 11 years, that I could've retired at and we could've been just fine. But it got to a point to where we were like, I'm clocking in, clocking out, and I don't really get to do anything with my life other than what the J-O-B says I have to do.
Chris H:
So we quit, got into business for ourselves doing that. We bought a gas station, and it did good. Bought another one, bought another one, bought another one. And then, we bought three within like, what?
Jan H:
I don't know, it was like, what-
Chris H:
Six month span?
Jan H:
Yeah.
Chris H:
And then one burned down. And then-
Jan H:
That was the game-changer.
Chris H:
Yeah. The movie went-
Jan H:
We got to figure something else out.
Chris H:
It took like a year to try to fight and claw back out with that. We didn't own the properties, so we just leased these. So we were still kind of on the hook to pay all this rental lease amounts and stuff, and it took a big toll on us and had us learn a lot about contracts. There's not much safety in really anything you do, how to be safe. So we said that we don't really want to continue on, I don't want to be 70, she doesn't want to be 70 and we still do gas stations. So we were like, "What else can we do?"
Chris H:
So we looked and looked and looked and looked, and we knew single families were not it, apartment complex, that didn't appeal to us. We got into looking at triple-net leases with Fortune 500 companies like Starbucks, Burger King, places like that, Dollar General, where you just purchase the property, and then the company entity rents it from you. And from what we went through from the burned down store, we realized that even if you have a contract with this person and it's personally guaranteed and they default, it still doesn't mean that you'll get paid through their personal guarantee.
Chris H:
Now, I don't know if that's different with everybody else, but this is Louisiana, and Louisiana's got a whole lot different laws than everywhere else in the country. So we said, "Well, if we did that, the cap rate, it's four, 5% return, it's not that great." And you still have the ... They promote it as no landlord responsibilities. And that may be true, but if it hits the fan, you're still hooked pretty bad. You don't really have anything to ... No lateral movement that you can do to fix this.
Chris H:
So we went back to the thing that actually worked for us, which was, well, the mobile home park land situation seemed to be good, so we started doing a bunch of research on that, stumbled across the MHU Boot Camp, and I think that was probably the turning point when the movie started going ...
Jan H:
Kind of like, "Oh, there's hope."
Chris H:
Yeah. So we started-
Jan H:
"We can figure this out."
Chris H:
... doing all that, and got into just learning about it and understanding it, and we could apply it to what we had previously went through, because we knew what you guys were saying makes sense, because it happened here, this happened. And it just fit for us, and we were like, "That makes, it makes a whole lot of sense."
Jan H:
Right.
Chris H:
So long story short, that's how we stumbled upon mobile homes.
Frank Rolfe:
What was the reaction of your friends and family to the concept that you would go into the mobile home park business. Was it negative, or supportive, or what did people think about that idea?
Chris H:
I think our family and friends have thought we were crazy-
Jan H:
Yeah, I think that-
Chris H:
... everything that we've ever done.
Jan H:
... it was probably more like, "Well, you're not going to have a steady income." Like when you quit the orthopedic clinic, that was probably when they were more concerned about how are you going to pay your bills, or afford insurance, or things like that. It was ...
Chris H:
It's always, "Don't do this, don't go into gas stations, people don't make money in gas stations." Or, "Don't go into this, because" ... You always have naysayers, and people-
Jan H:
I don't even think they ever thought about the possibility of owning a mobile home park.
Chris H:
[crosstalk 00:08:18], and I get where they're coming from, because we had just gotten married, and we were established, I had a job that I could've retired at, and great benefits, they took care of me, she was pregnant. Like, why would you mess this up, dude? And me being me, it's not where I felt I'd wanted to be. It worked, but it didn't work for me. So that's what we, we just had to get out. But everybody kind of thought we were crazy. Now, they probably still think we're crazy.
Jan H:
They definitely think we're crazy.
Chris H:
But we don't really let it affect us.
Frank Rolfe:
Right. And how impacted were you by that bizarre North Lamar resident picketing at that boot camp? Since you're one of the few people that I've talked to since that was there for that. And [crosstalk 00:09:11]-
Chris H:
I [crosstalk 00:09:11] a video of it. I think it-
Frank Rolfe:
For people that weren't there, what happened was the residents of North Lamar Mobile Home park, the one we owned in Austin, they were pushed by then-city councilman Greg Casar, I believe now mayor of Austin, or was mayor of Austin, to stage this kind of picketing, uprising thing out in front of the hotel lobby. And it was just bizarre. I'm not really sure ... It was a PR moment for them, but did it in any way make you question the industry, because here were people who most, in fact all but one or two of which did not live in North Lamar, brought in through MH Action, a lobby group, did that have any, make you question what you were doing? Or were you like, "Eh, this is just ridiculous."
Chris H:
It's interesting to me, because this seems to be ... And I've watched this over the last decade, to where the narrative, for some reason, people don't ... I hear what they say. But then when it reaches my brain and it gets downloaded, all I hear is, "We don't want you to invest in affordable housing. We want you to invest in middle class." And I'm like, "you don't want" ...
Frank Rolfe:
Chris, we lost you for a second. That's no big deal.
Jan H:
Nope, we can [crosstalk 00:10:33]-
Frank Rolfe:
So just [crosstalk 00:10:34] where we lost you, just-
Chris H:
I still got train of thought. So when people do things like that, you hear it in the media, it's always like, "The man, the man, the man." And I'm like, people are trying to invest in affordable housing and make these things better. No one ever pickets the apartment complexes, no one ever pickets these people that have single-family residences. I just don't understand ... It's almost like they have a PR problem, to where, I don't understand what you're talking about. I understand that you hate me, but I don't understand why. Because if I'm actually trying to purchase this place and make it better, and bring more people in, where's the downside?
Frank Rolfe:
I agree. That was always the saga in North Lamar is, as we were trying to bring it back to life and raise the rent towards market rent, people wanted both. They wanted us to bring it back to life, but charge no more rent. In fact, they wanted us to charge no rent, which is a strange narrative in Austin of all places, where they have the highest home prices and apartment rents in the state of Texas and among in the nation. So it's kind of strange they would jump on us where we had residents living there for 450 a month, basically, and not a care in the world. So yeah, it was a very strange moment in American history [crosstalk 00:11:43]-
Chris H:
It's an interesting phenomenon. I think I've still got video of it. It happened at lunch, I think we were all ...
Frank Rolfe:
Chris, we've lost you again here. Hopefully it'll reconnect here. Uh-oh, Chris, your internet in Louisiana [crosstalk 00:11:58]-
Chris H:
I'm sorry, it's Louisiana, what are you going to do?
Frank Rolfe:
I don't know, I hear you. So all right, well, let's then talk about ... So what was the criteria? You came out of boot camp, and you were looking for certain criteria in a mobile home park. What were the kind of things you were looking for? What was your territory, what kind of attributes did you want?
Chris H:
Well, a sane person would say, "I wanted something local that was this wonderful thing," but I was used to working the gas stations that were an hour this way, an hour this way, and you had to go there every day. So distance, running something from a distance, I got pretty good at. So I was jumping on planes going and looking places, which hindsight, I don't know if that would've been the greatest thing for me, because I like to micromanage. And I have to get back a little bit. So having something halfway around the country probably wouldn't have been the great idea. But I would only go if there was something that was really, really good, but it seemed like every time I went, it sounded great on paper, "This is what we have," but then you show up and it's like, "This is not how it was described to me."
Frank Rolfe:
Right. What-
Chris H:
[crosstalk 00:13:15] a brand new [crosstalk 00:13:17] ... Say it, what's that?
Frank Rolfe:
I said what size property were you looking for initially? How many lots were you looking for?
Chris H:
Anything that made sense. Obviously I'm not going to want something that's four, five states over that's 10 lots, but I was shooting for 50, at least. Because I think I ran across either something you and Dave did, it was something like retire off one park, or how to make $100,00 off of-
Frank Rolfe:
[crosstalk 00:13:46]-
Chris H:
... one park, or something. Yeah, NAD that kind of sparked an interest in me, because I was like, "I can't really put a million dollars in the stock market and get a 10% return, or have any control over it, or try to groom it and live off of it."
Frank Rolfe:
Right.
Chris H:
So I'm looking for some type of annuity where I can put my money in as like a stock, and then have a dividend payout and cashflow each month that I could use to live off of. Where are you going to find that, that's where you just got to kick over rocks and keep looking. So my criteria was something that could fit that model. Whether the expenses were high, low, it just had to make sense to where it continue to turn and feed us.
Frank Rolfe:
Got it. And you looked for, what, two or three years, correct?
Chris H:
Yeah, we looked for, might've been longer than that. But ...
Frank Rolfe:
Chris, we lost you again here.
Jan H:
Okay.
Chris H:
I feel like I'm just going to have to answer your questions directly and you just go to the next thing. Another question, hurry.
Frank Rolfe:
Not a problem. So go ahead, you were talking about how long it took you to find one.
Chris H:
Yeah, I think it was like three years. Every time we went somewhere, it made sense, we got there, and we ran across so many weird scenarios. I had one where the government sent, the US government, the federal government was sending letters, and also the EPA was sending letters to this person from her water. It was in Ohio, I don't want to say where it's at, but it was in Ohio. And huge, huge problems. But it was given to us as, "Oh, this is great." It's a 50 pad park, four, 450 lot rent, I think, 90% occupied. When it got there, it was like maybe 9% occupied. And at night I'd, everybody usually comes home around after 5:00, so I would wait until about 7:00, 7:30 and drive the park, and see if people were actually parked there, if power was on, if the air conditioning was going. It was not, it was not what they claimed it would be. We had another park that we found that was, it was like a 100 something pad park. We got a lead on it from a friend that knew something about the park, and when we approached the guy, he was extremely, "No, we're not selling, we're never selling. My whole family has to live off this place," da da da. We were like, "Ooh, okay." We backed off.
Chris H:
Come to find out, don't know if it's the truth or not ... Well, I know it's ... He was a convicted pedophile. I don't know if why he didn't want to sell it was true or not, but what I was told was that he was worried that he wouldn't be able to live anywhere else. And I was thinking, if you own and run the park, and this is not a pedophile park, I don't know how you're able to do this legally.
Frank Rolfe:
You're probably not, actually. [crosstalk 00:16:41].
Chris H:
Yeah, yeah. So like I said, we ran across a lot. We had one under contract that had an oxidation pond, it was like 35 units, all park-owned homes. Everything looked okay, the oxidation pond had me worried, because I've talked to you several times, and you're like, "Just say away." And you have to have an operator ... I don't know how it is everywhere else, but Louisiana you have to have an operator for your oxidation pond. And I had an operator meet me out there, and he and I were talking, and he was like, "Well, there's a problem here, there's a problem here, there could be root" ...
Frank Rolfe:
Go ahead, Chris. There's a problem here, there's a problem there.
Chris H:
Persistence, man, persistence.
Frank Rolfe:
[crosstalk 00:17:25] go ahead.
Chris H:
So anyways, there was a problem with the levee, and he said it could be some root extrusion, because the guy had not maintained this oxidation pond for over 30 years. He had two goats, goats that would ...
Frank Rolfe:
Okay, you were at two goats and then we lost you, so go ahead. Two goats.
Chris H:
He had two goats, they would eat the vegetation around, and that's about all he would do. And the guy was like, "He doesn't have a," what was it, a chlorinator? He doesn't have a chlorinator, he doesn't have this, he doesn't have that. So I was like, "All right, that's fine."
Chris H:
So he left, and I went back and talked to the seller. And I asked him, "Do you have a permit or anything with the DEQ?" Because in the gas station world, you have underground storage tanks for gasoline. Well, you're very aware of the DEQ, the Department of Environmental Quality, how they run this. And I asked the man, "Do you have a permit from the DEQ?" And he says, "The who?" I said, "The DEQ." And he says, "What's that?" I was like, "It's the Department of Environmental Quality, they" ...
Frank Rolfe:
Okay, DEQ, Department of Environmental Quality. Go ahead, that's where we were.
Chris H:
And I told him what it was, and he said, "No, I don't have that. You don't need that, you don't need any of that." And I said to him, "Oh, okay." But I was thinking, "What? What are you talking about?" So come to find out he has a permit, still to this day, he has a permit from the local, but he does not have one from the state, and he has not had one for 30 years. So we were like, "Eh." We dropped that. But it just, I mean, I've got story after story after story parks that just, they fell through, they fell through, they fell through.
Jan H:
[crosstalk 00:19:10] questions.
Chris H:
I'll probably get cut out by my computer in a second, so ...
Jan H:
[crosstalk 00:19:14] as time goes on, though, like more questions to ask, and like, "Okay, cool, we don't need to talk anymore, you have no clue what you're" ...
Chris H:
It made us feel like we were sharpening a knife. Because you would go to one thinking this was ... But it would be something you never thought about or something you didn't think to ask in boot camp, because you didn't know to ask. But then you would go through this scenario and be like ... These are some giant pitfalls that if you just go, "This park's for sale, and I heard parks are good to buy, and I'm just going to buy it," it could be catastrophic.
Frank Rolfe:
So how did you find the park that you ultimately bought?
Chris H:
There was a listing locally for a park that was about two hours south that I didn't want, but we figured let's just call and see. Called and I talked to the guy, ended up that I knew the guy, and he told me, "Hey, you don't probably want that park. I've got another one that I'm going to unload that's a lot more efficient." I was like, "Okay, what you got?" He's all, "It's 45 pads, it's all direct-billed city water, city sewer, city trash." And I was like, "How much do you want for it?" And he's like, "A million 50." And I was like, "Okay, give me the address," and I went and checked it out. Drove through it, beautiful park. Because, I think, everything that we had went through, we were just very cynical.
Jan H:
"What are we missing?"
Chris H:
"What am I missing, what am I missing? Let me comb through this, like what am I missing, what am I missing, what am I missing, what am I missing, what am I missing?" And every time I just did it, it was like, I know what he's got in it, what his revenue was, I know what his expenses were.
Frank Rolfe:
You were saying, and you knew his expenses.
Chris H:
I knew his expenses, but I didn't really care what his expenses were, because his model was not the business I was about to purchase. So he had, it's about half and half tenant-owned homes, park-owned hims and he had a .. Not a ... Wait, I guess he was his manager, he called him his manager. He was also like a full-time maintenance man that was like 108, and it took him two months to get anything done. I was just going through like, "I don't need to even see this, because I'm not going to use this."
Chris H:
So when I did the math on it, it came out to be, after I did what I was going to do, and what his sale price was. We were looking at like a 18 cap. So we were like, "All right, we'll buy it. Let's get in our contract like yesterday," and did our due diligence. Very important that if you have a park under contract, walk the entire perimeter. Because they thought they had ... I say 45. They thought they had 38 pads, I think, but when I walked the perimeter, in Louisiana it takes like two weeks for the vegetation to just take over.
Jan H:
Swallow it.
Chris H:
And they had sewer taps, power poles, meters, they had lots they didn't know they had. They thought they were just woods, wooded areas, whatever. They had little spots for RVs, which actually, this is not that part, this is another part, I actually saw that old SNL skit, I saw a man in a van down by the river. They had a shop, it was like a 50 foot by 50 foot shop. You walk around the back side of it, and you almost trip over a meter base. So it had everything set up for that. I don't need a 50 by 50 shop. So I was like, "We could tear this down, put a place in here." They had let a guy build a fence that he took up two-
Jan H:
Yeah, two lots.
Chris H:
... lots, and obviously behind the fence was just, it was all in disarray. There was two lots. We found two additional ... So when we got done, we had 45 lots, and we were like, "You could easily fill these, no problem."
Frank Rolfe:
And [crosstalk 00:23:24] you had how many? 30, 30 something?
Chris H:
38.
Jan H:
38.
Chris H:
38, I think?
Jan H:
Mm-hmm (affirmative).
Chris H:
Yeah.
Frank Rolfe:
Okay, got it. Okay.
Chris H:
Yeah.
Frank Rolfe:
All right, so-
Chris H:
So we-
Frank Rolfe:
Since the place sounds screwed up, how did you finance it? Did you go to a bank, or did seller finance, or how did you work that?
Chris H:
Every time that I went to look at a park and see if I could get financing on it, I would always start with the park that it was financed at at the moment. Now, I don't think I've ever ran across one that the owner had it free and clear. I'm sure it's out there, but I always started with the bank that it was financed at, because they're the most familiar with it. I have several banks here locally that know me, and coincidentally the bank that held the loan was a bank that I also do business with, so it really wasn't that hard. They knew about it, they're like, "Okay, cool. What do you want to do?" Yada yada yada, "Yeah, that's fine."
Frank Rolfe:
So the [crosstalk 00:24:19]-
Chris H:
So it was a cakewalk for me.
Frank Rolfe:
... plan was basically to bring law and order back, mow down those lots that vegetation ate, rent those out. I assume raise the rent, cut a ton of cost, get rid of all the goofy stuff that old people do often with their mobile home parks, was that pretty much the plan?
Jan H:
That was it.
Chris H:
That was textbook, yeah.
Frank Rolfe:
That was [crosstalk 00:24:40], okay.
Chris H:
That was textbook. That's why I was able to see, like, "This is not the business model I'm going to do, this is the business model I'm going to do, and if I do this with not too much capital put into it," it was about an 18 cap.
Frank Rolfe:
Right.
Chris H:
So then you could bring in some more stuff, and then ... To me, that was a secondary business. To me, it's almost like you have two different businesses. You have the land business and then the top of the land business, which I don't really want to be in the top of the land business, but it is an extra business that you can be in.
Frank Rolfe:
Right.
Chris H:
It's not the greatest, but that's why we pushed all the park-owned homes into rent-to-owns.
Frank Rolfe:
Gotcha. So what lessons learned have you had on the park so far of things you wish you'd done different, or things you wish you'd done faster, or has it gone pretty much just according to what you thought?
Chris H:
We hit the ground running.
Jan H:
Yeah, that's what I'll say.
Chris H:
Like I was trying to move heaven and earth as fast as I could.
Jan H:
[crosstalk 00:25:32].
Chris H:
I don't know, it was very ... Like I said, I'm still ... It's been about two years we've owned this park, and I'm still like, "What's the catch?" It really hasn't been that bad, I can't think of anything that I wish I would've done sooner or better, and I think that's probably just because, as ... There was a time where, we even went on vacation, and we were listening to all your CDs over and over and over, just to try to-
Jan H:
So much research.
Chris H:
... sharpen the knife.
Jan H:
Mm-hmm (affirmative).
Chris H:
Drill, like ...
Jan H:
Second-nature.
Chris H:
Yeah, like if you're going to do something, why are you going to do it, and what are the 10 steps that could possibly ... It's a lot of overthought, but it's-
Jan H:
Try to avoid problems as much as you can.
Chris H:
... helped us, and I think it's because of just the life that we've lived, with all the problems that had been in business, we are slated toward catastrophizing. So we always look at what is the worst case scenario, and let's work backwards.
Jan H:
How to avoid that.
Chris H:
If it works out, who cares, great. But if it doesn't, how can we block these things to where we get more of a bulletproof plan?
Frank Rolfe:
Right. And in this case of the park, as well as you bought it, you could've had a terrible worst case and still done decently, right? I mean-
Chris H:
Yeah, I don't ... I mean, some of the, when we tore down that 50 by 50 shop, we brought a home in and we went to plug it in to the sewer, and that thing had been forgotten about for so long that the root extrusion into the sewer tap down to the main, probably 25, 30 feet, maybe? You couldn't get a snake through it, because the roots, the pipe's like this, the roots were like, just they were everywhere. And the guy was like, "Man, I can't do anything with this, I'm going to have to just cut it-"
Jan H:
Cut it.
Chris H:
... "and start over." And I was like, "Do it, that's fine." We plan for uh-ohs, but we didn't even think that was going to ... That was like cherries on the top that we found. The deal was still a good deal, but it was like extra cream that we were like, "Okay." So any time something bad happened, we were still like, "Okay, that's fine, it's still okay."
Frank Rolfe:
So what was your worst day ever with the park so far? What was like, you're like, "Yeah, what a bad day."
Chris H:
Four days after we closed, four days after we closed, we had a dog. We were going around trying to get all new leases and stuff, and the maintenance man still worked there. And I showed up one day, and he was like, "How you doing?" I was like, "I'm good, how are you?" And he's like, "I'm good. There's a kid that got bit by a dog yesterday." And I was like, "What?" And he was like, "Yeah, I think he almost bit his leg off," or something like that. I was like, "Wait, what?" And I was like, "No, you're over-exaggerating." And so one of the tenants' dogs got out that wasn't supposed to have a dog, that bit another kid, or I don't remember exactly how it was. But anyway, I showed up at the mom's house, and I'm like, "Hey, I heard your son got bit by a dog." And she's like, "Yeah, he did, and he's on the couch." And I look over, and this kid's got this giant bandage around his thigh.
Frank Rolfe:
Oh God.
Chris H:
And I'm like, "Okay, maybe-"
Jan H:
Where's this going to go?
Chris H:
Yeah, where's it going to go? And she showed me some pictures, it wasn't that bad, and I was like, "Okay, well what ... What did you do?" "We took him to the hospital, they bandaged him up and said he'd be fine, gave him some medicine." And I was like, "All right." And at that time I'd already called animal control, animal control was standing with me. He was like, "That doesn't sound right, because any time somebody gets bit by a dog, the doctor's supposed to actually figure out what dog it was, if they had their rabies shot, all kinds of stuff like that, which they didn't do. So anyways, needless to say, that day was probably-
Jan H:
We got elevated really quick. [crosstalk 00:29:29]-
Chris H:
Yeah, I was like, "Oh, no."
Jan H:
[crosstalk 00:29:32].
Chris H:
Four days into this, I'm fixing to get sue and lose everything that I have because of this stupid dog.
Frank Rolfe:
You had insurance, though, right?
Chris H:
It doesn't matter. It doesn't-
Jan H:
[crosstalk 00:29:39]-
Chris H:
... I had insurance when the store burned down. It helped, but you still got problems, bro.
Frank Rolfe:
The realities of America, right, exactly.
Jan H:
Worst-case scenario.
Frank Rolfe:
Now, do you have a manager in this property? Oh, so you fully self-manage.
Jan H:
Yeah.
Chris H:
Yeah, it's not like ... Everything's on rent credit, I mean, it's all public utilities, direct billed. Right now it's 100% capacity. We did our test ad, we did it in like, I think it was Facebook Marketplace or something like that, and it was like a rent-to-own, two and three bedroom houses for, I don't know what it was, 695 to 795 or something like that. We had to stop it after like, what, two days? Something like that?
Jan H:
Quick.
Chris H:
Yeah, we had like 60 people-
Jan H:
[crosstalk 00:30:30].
Chris H:
... like in two days, and we were like-
Jan H:
It's still like that, [crosstalk 00:30:31]-
Chris H:
... "Okay, that's done." So it's in a college town, it's ... This is something else that, you know the criteria that you look for is like the 100,000 population, the good diversification of employment.
Frank Rolfe:
Right.
Chris H:
Something else I've noticed, that if you meet all these criteria and you've got like 15 mobile home parks in the vicinity, okay, but if you only have one, that's, to me, that's a little bit different. So the town where we're in is not 100,000 population. But it is the last living, breathing mobile home park in the city limits. So it's a very sought-after place to live, and if you don't have that much affordable housing ... This is where I think the criteria of the bullseye is that 100,000 population with all the good stuff, but there are caveats to that.
Frank Rolfe:
Yes, I agree.
Chris H:
But I wouldn't just shotgun that out to everybody, because they'll be like, "Oh, well, Chris said that if the place only has 5000 people living in the town, that you could buy" ... No, that's not what I mean.
Frank Rolfe:
Right.
Chris H:
But there are exceptions to the rules, I guess.
Frank Rolfe:
Yeah, absolutely. We own some parks in Colorado where the populations are only 10,000, 15,000 people, so it's all about how many lots there are, as you say, and then additionally, how high the home prices are. So there's a lot of [crosstalk 00:32:01]-
Chris H:
And then it translates into it. I think you and I talked one time about how, especially specifically in Colorado, I think when I was headed down to see you. I was looking at these old 1970 mobile homes that were going for like $43,000-
Frank Rolfe:
Yeah, it's crazy.
Chris H:
... in a lot. And they're nice, but they're like old. And I'm just like, if you look at that, if you bought the place, you're buying a gold bar that's placed on top of this land that you could turn and sell. And I see, there's another parallel ... I'm just rambling, I hope that's okay.
Frank Rolfe:
No, ramble on, it's all good stuff.
Chris H:
When we got into the gas station business, I noticed that it's almost like a two part, that mobile home park situation, too. You have the property that you purchase, but then you go in the night before you close and you do an inventory count. So you can count all the chips, all the Cokes, all the, all the, all the, all the. So you get this number, and say this number is, all right, you got $300,000 in inventory, that's gasoline in the ground and everything. So you've got these two people, you got the property owner that's taking the loan out for the bank, and then you have this lessee that's going to be the operator for the store. So the lessee pays the property owner for all of this inventory, and I think what happens is this inventory, say $300,000 goes to the inventory, this property owner takes this and gives it to the bank as a down payment. They're not really in it for anything.
Chris H:
So if you look at park-owned homes kind of like that, if you have enough park-owned homes, I know people that don't want any, it's like, well, if you look at them like Snickers bars on top of your land, you may be able to grab those up and say, "All right, well, I had to put down $150,000 to the bank, if I sold these homes all for," whatever the math would be, 3000, 5000 in a bang, I might be able to just get this park for free.
Frank Rolfe:
Right.
Chris H:
Does that make sense?
Frank Rolfe:
Yep, it does. Let me ask you this, how much time do you spend managing this park? In other words, how many hours a week would you say on average you do something, make a call, do anything?
Chris H:
Only when we have someone that's late on payment.
Jan H:
[inaudible 00:34:17] when rent's due.
Chris H:
And it's not a lot, because other states may be different, but it's due on the first, we give a five day grace period. On the sixth, it's a $75 late fee. On the 10th, it's an additional $75 late fee. So most of the time, people pay. And if they don't pay, that just means that we have to track you down and go through all the mumbo jumbo, so that's kind of what she does. And we've gotten it to where they don't know that she's my wife, how we set it up in the beginning. I remember you telling me about the, Mr. [Todera 00:34:51] like you separated yourself as the owner to, "I just work for the guy," right?
Chris H:
I didn't do that when I went in, so she's management. So I say, "Hey, call the office," we have a Google Voice number that's not my cell phone, "Call the office and talk to Jan about it, and she'll see what she can do." So if she ever has to get on the phone and talk to somebody-
Jan H:
It works really well, that I just work for the company. And I can, talking about the notes I have to make on their files, or whatever, don't want to red flag them, whatever, whatever, whatever, like, "Oh yeah, gotcha. I'll CashApp it right now, I'm sorry. I don't want you to get in trouble." I'm like, "Thank you."
Frank Rolfe:
That's a smart way to do it, yep.
Jan H:
So everything's been pretty-
Frank Rolfe:
So you guys, in other words you were doing the orthopedic thing, gas station thing. So is this park your whole thing right now? Are you [inaudible 00:35:42] stuff besides the-
Chris H:
No, we still have one gas station.
Frank Rolfe:
Okay.
Chris H:
We'll probably keep it until ... Like we have some other people that are in it with us, well, we employ them, and they do good with it too. So as long as they're still happy, we're still happy. But we kind of wanted something to where if the lease runs out, or some-
Jan H:
We didn't want to redo the lease. [crosstalk 00:36:03]-
Chris H:
Yeah, we didn't want to redo a lease, or a catastrophic event happens, we kind of got all our eggs in one basket to where I guess you could argue that we do now too. But at least we actually own something now, and not just maintain a cashflow. I've got some equity in something that we own. That was kind of key to where if it hit the fan, we could be that mom and pop that just lived off their land. I'm not going to stop, because I'm still in my 30s, and I'm like, I'm not the type of guy-
Jan H:
There's no reason to [crosstalk 00:36:35], yeah.
Chris H:
... just be like, "All right, I'm just going to go sit on the porch," that's not me.
Frank Rolfe:
Yeah, so you're kind of the human embodiment of my article on retire on one park, though, is that correct?
Jan H:
Yeah.
Chris H:
That's kind of what we based it around.
Frank Rolfe:
Okay.
Chris H:
Because like I said-
Frank Rolfe:
What's [crosstalk 00:36:49]-
Chris H:
... if you try to find something ... Yeah, yeah.
Frank Rolfe:
So what's the plans moving forward? Are you going to try and buy another park, or are you just going to say, "Eh, I'll just stop with what I got," or what do you think?
Chris H:
I don't want to stop, because if someone came up and offered an amount that I wouldn't pay for it, I would have to probably say, "Okay." And then it would leave me back in the little rat on the wheel again, trying to run and find something. To me, that's the problem with selling. Like I know a lot of people that they'll buy something and flip it, and all right, you've got all this bunch of cash, well now you've got to deploy the cash. So that takes the rat on the wheel to try to figure out where to put it now, instead of a buy and hold. But buy and hold, it also has its complications to where that's all you have. So I like the idea of having something that you buy that you try to turn around and flip, but in our situation, we're kind of set up, and I don't want to poke the bear too much. So anything we take on now has to be what we've got a criteria-
Jan H:
Yeah, what we know we're looking for. We're always looking for.
Chris H:
It's got to kind of fit our code.
Frank Rolfe:
Gotcha.
Chris H:
Don't do this, don't do this, do this. Because you don't want to fall off into something just because you ... Like we talk about this all the time, "Okay, let's get another park." Okay, why? "For more money." Okay, for what? "So we can travel." Okay, where do you want to travel? "The same places we go," that you're able to do now. So what's your why, like why? Because you want to? It's almost like putting yourself out there for some liability risk when you don't really have to. So [crosstalk 00:38:30]-
Frank Rolfe:
Yeah, no, I agree. [crosstalk 00:38:30] quality of life is the [crosstalk 00:38:34], right? I mean, as I've said many times, my best thing about mobile home park owning was being at all my daughters' school and sporting events, right? So I was the one dad who was there at everything, and then when she was graduating, they gave me some award, as I recall, for being the only dad that had not missed a single game or school event of all time. Because basically it was rare for a dad to show up at anything, I was at everything. I was in the stands eating [crosstalk 00:39:03] corn and Frito chili and you name it, game after game after tournament after tournament. All my myself, sometimes. And [crosstalk 00:39:13]-
Chris H:
"Does he have a job, is he just a bum? How is he able to do this?"
Jan H:
"What does this guy do?"
Frank Rolfe:
Yeah, which is weird, but yeah, that was super important to me, for sure. And let me ask you this, obviously for those who are unaware, the decorations behind you, those are Mardi Gras, correct?
Jan H:
Oh, yeah.
Frank Rolfe:
Right. [inaudible 00:39:31] Louisiana [crosstalk 00:39:33]-
Chris H:
We're just gearing up for next month.
Frank Rolfe:
Oh, really?
Jan H:
Yep, getting it geared up.
Frank Rolfe:
"Why is Chris leaving his Christmas decorations up so late?" Those aren't Christmas decorations, they're Mardi Gras.
Jan H:
Yeah, it's purple, green, and cold.
Frank Rolfe:
Decorations, right? So if you were to buy another park some day, years in the future, would you buy another one in Louisiana? I mean-
Chris H:
Sure.
Frank Rolfe:
... have you-
Chris H:
I would. I say yes, and I also say, but.
Frank Rolfe:
Okay.
Jan H:
Depending on where in Louisiana.
Chris H:
Storms are getting harder and harder. Last year, was it? I think last year-
Jan H:
Last two years we've had issues.
Chris H:
I think it wast last year, though, Hurricane Ida? I don't remember which one it was, there's so many. It hit so hard that where we are, we're in the northern part of Louisiana, it was still a Category 1 when it hit ... It almost hit Arkansas as a Category 1.
Frank Rolfe:
Wow.
Chris H:
So it worries me purchasing something that's down south. I've got friends and family that call me all the time asking for business advice, and now they specifically call for mobile home parks. And I've got a family member that's bought multiple parks, I've got a couple friends that have bought multiple parks. And I try to do my best. I know how people were with me, like, "Oh, you don't want to do that," or, "Don't do this." You have to make your own decision, and I'll help in as many ways as I can, but I don't want to deter someone from buying something down south. If you feel it works for you, it works for you. I don't think it would work for me, because I would be constantly worried ... "We're going to have a hurricane, what's going to happen, what's going to happen? "
Jan H:
Hurricane season, hurricane season. Yeah.
Chris H:
I would start catastrophizing, and everybody'd be like, "Look, it's sunny outside, calm down." I'm like, "Yeah, but-"
Jan H:
Give it 12 hours.
Chris H:
I just don't want that in my life. So would I buy another one in Louisiana? Yes. But it depends on where it's at, what the movie looks like, right? Like if the movie's a horror movie, I don't want to watch that. I'd rather watch ... I don't know, what would you consider ... Like I'm fine with a comedy, you know? It turns into a comedy, that's fine with me. Just I hope it's not [inaudible 00:41:43].
Frank Rolfe:
So would you say overall, it would seem your mobile home park experience has been a positive thing, happy thing, good thing?
Chris H:
The one we own, yes. The ones that other people own that I've seen that we've looked at buying? I don't know. They have a horror movie. And it's a lot of these mom and pops where I just, I don't know what ... I don't know. I don't know, I don't know how they got in the position they're in, I don't know what they were thinking, I don't know how they let things get bad so fast. There's a lot of people around here that have them that when I talk to them, they are dead set on, "Oh no, you have to rent the trailer."
Frank Rolfe:
Right.
Chris H:
That was pretty good [inaudible 00:42:27], right?
Frank Rolfe:
That was, the signal held really good that time, man. I'm feeling like [inaudible 00:42:30] on that one.
Jan H:
I'll hold my breath.
Chris H:
Yeah.
Frank Rolfe:
Yeah, that was really good.
Chris H:
No, just a bunch of people around here in the south, like I think Mississippi has the lowest lot rent, it's almost like $5'll get you in and stay there for a year ...
Frank Rolfe:
Mississippi doesn't want you bad-mouthing them, that's the deal. As soon as they heard Mississippi, they scrambled your-
Chris H:
[inaudible 00:42:57].
Frank Rolfe:
[crosstalk 00:42:57], right? Do you find in Louisiana, one thing I found with my foray in Louisiana's a huge number of private utilities. You see the same thing, I mean, I can find stuff in greater Shreveport close in on lagoons. You find that [inaudible 00:43:13] a lot?
Jan H:
You can drive down the road and they're ...
Chris H:
If it's not in the city limits, I don't understand how you got public. It's almost like everybody's got an oxidation pond. And that was the man that lives like in the van by the river, except the river is actually-
Jan H:
It wasn't a river.
Chris H:
... an oxidation pond.
Jan H:
It was a, yeah.
Chris H:
So it's, everywhere you look, it's almost like that's something ... And it could be that that's because everybody that's been raised down here, like we were born and raised here. It's just normal for us to ... You'll be driving down the road and see a bunch of houses with a green ...
Jan H:
Sludge.
Chris H:
A poo pit.
Jan H:
A sludge pit.
Chris H:
It's like, that's just how it is, and maybe that's why people around here are like, "So?" I was told that eventually, these things will probably be deregulated to where you can't have them anymore, and that's another thing that worried me, because I don't want to have-
Jan H:
[crosstalk 00:44:01] have to convert it.
Chris H:
They take up so much land, and then you can't just cover it. There's probably a bunch of remediation you have to do to it to get it properly up to code, they're going to want. Then you got to attach it into something, either city sewer, if you don't have that, you're going to have to drop hundreds of thousands of dollars onto a packaging plant or a mechanical system. I don't want that in my life. So it would have to be a really, really good deal to take that on.
Frank Rolfe:
Yeah. I wonder from the infrastructure plan, I know Louisiana gets a bunch of infrastructure money, if part of the infrastructure money was to build sewage, because that seems to be one problem all of Louisiana shares is they don't have a lot of access to city sewer. Water yes, but sewer no. So maybe the future is through the infrastructure plan that did pass, the hard infrastructure, maybe they do put in the lines and then maybe they do make you connect at some point, which might be a nightmare, because you have to build a lift station and maybe [crosstalk 00:44:57] fees or God knows what. Certainly a lot more monthly cost for it.
Frank Rolfe:
So what would you say, in summary, so what are your top three takeaways from your adventure so far? What would be, if someone was watching this, what'd be the top three things to tell somebody who's pondering buying a mobile home park? Trying to follow your lead, what would be the three best words of advice you would give somebody?
Chris H:
Well, the first three things that pop into my head are freedom, freedom, freedom. Don't give up. Be persistent. They are out there. You don't need to wait around. What do you think?
Jan H:
I mean, that's kind of what I was thinking. And also just getting used to the mom and pops, when you talk to them, it can be pretty discouraging. But once ... Move on. Like once you get the weird information or the stuff that's blowing your mind, just let it go, and then just keep moving on. Because you're going to run into about five more of those, and that's also okay, and then you'll find somebody else. Because we took it in pretty negatively for a while, I'm like, "What is going on? What's around us?"
Chris H:
Yeah, "What are we doing wrong?"
Jan H:
Why are we seeing this, that that's a crazy situation?
Chris H:
That they don't see.
Jan H:
But you just kind of have to take it a little bit lighter and just enjoy the ride, and just keep pushing through, keep looking.
Chris H:
It's interesting, because there are places out there for sale. But when you approach some of these people, like we had one, the guy wanted like 1.2 million over what it was worth. He also wanted both of his daughters ...
Jan H:
To live free.
Chris H:
To still live free there. And I'm like, "Anything else, can I wash your car? What do you want me to do?"
Jan H:
And so at that point you're like, "Okay, next."
Chris H:
Yeah. So-
Jan H:
Moving on.
Chris H:
Yeah. I don't know. I have looked, I'm in the gas station business, I've been in retail, I've been in single family, I've been in apartment complex, I've looked at triple nets, they have those problems too. I will still look, I'm not married to mobile home parks. But at this moment, I cannot see anything better, any better class to be in than that, especially since after we, I mean, we bought and survived through a pandemic. Other businesses collapsed.
Frank Rolfe:
Right.
Chris H:
We had a restaurant at one time. I can't imagine having a restaurant, trying to get through the pandemic right now.
Jan H:
I think a tip would be helpful, too. Never letting them know, people who live in the park know that you own it. Like you were saying, I have dodged so many bullets because they don't know me. They don't know who I am. I just work for them. And that would be 100% the only way of going into another park for us, would be like, "I just work there, you're helping me out if you handled this," that type of thing.
Chris H:
Because she won't get in trouble. Like, "I don't want to get in trouble at my job."
Jan H:
Yeah. I'm going to get in trouble, yeah.
Chris H:
It's like a psychological thing that you can relate to that, because you have a job, you understand how it is at your job, your job sucks and you hate your boss. This person is kind of like me too, that she doesn't want to get in trouble for not collecting or whatever.
Jan H:
Yeah, so that's a big deal. It's a really big deal. I can get stuff handled within just one conversation, whether it's on the phone or face to face, and they're like, "No problem, I'll have it fixed," or, "I'll stop," or, "I'll bring you the check now, I don't want you to get in trouble." It just solves ... There's no reason for them to know who I am, and it just works out really, really well. That would be something I would encourage everybody to think about going forward.
Frank Rolfe:
Yeah, definitely deflects any resident anger and creates [crosstalk 00:48:46]-
Jan H:
Oh yeah, so good.
Frank Rolfe:
... empathy, for sure.
Chris H:
Yeah, I've had people, when we took over ... It was almost, I equate it now to like, if you go to prison, the movies tell you to find the biggest dude in the yard and pick a fight with, it's almost like, that's almost what happened. When we went in and I tried to, "These are the rules that I would have to abide by in order for me and my family to live here, so I'm going to try to slate it towards that way, and if you don't like it," some people didn't like that. So knowing that I was the owner, and I was coming in here and I was telling them what to do-
Jan H:
Or like the broken-down cars. There was one lady that had like two abandoned cars with no license plate, stuff growing up in it. It was a huge, huge deal, and every time you spoke to her, it always escalated.
Chris H:
Yeah.
Jan H:
And then I called her one time, just being the girl who worked for them, and it was like two days, both cars were gone. And she called me personally and said, "I took care of it." Because I wasn't him. And so just because ... She helped me out, so I didn't get in trouble. So she handled it and had her cars removed.
Chris H:
But if I do it, they'll threaten physical violence. It's like ... Because I guess it's just because, "Well, this guy's coming in here and he's going to-"
Jan H:
[crosstalk 00:50:00] "Change everything."
Chris H:
You do realize I own the land? You're living on my land. "But we were here before you." Like, I understand that, but-
Jan H:
That's not what the conversation [crosstalk 00:50:08]-
Chris H:
... whatever.
Frank Rolfe:
Right. Well, let me ask you this. If people have an interest in reaching out to you just to ask you a question or something, if Brandon forward you an email or something, would you be kind enough to respond if anyone wants to ask your opinion-
Chris H:
Totally.
Frank Rolfe:
... [crosstalk 00:50:22] gas stations, or-
Jan H:
Sure.
Frank Rolfe:
... mobile home parks? I mean, are you willing to join the fraternal order of mobile home park owners who respond to people's input? So that would [crosstalk 00:50:35]-
Chris H:
Sure, we're totally-
Frank Rolfe:
Have any questions, go ahead and email Brandon, he will happily forward it on. And again, we really appreciate you being on this lecture series [inaudible 00:50:44]. A lot of great information here, you all are great, great, very nice people to spend your time here talking to other people who you don't even know how are thinking about or looking into buying a mobile home park, and your story is truly inspirational that you could go to a boot camp with scary rioters in front, not be weirded out, choose criteria, stick with it, and then find a park at an outrageously low price from a mom and pop. So you got to love the whole story altogether. So again, we really appreciate you being here, and that pretty much wraps up this lecture series event. So thanks everyone for spending your evening with us talking about mobile home parks, and we'll see everyone again soon.
Jan H:
Thanks.
Chris H:
Thanks.